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How Qatar bought London

In his encomium to the Shard, London’s newest and tallest skyscraper, Boris Johnson declared that it was “a symbol of how London is powering its way out of the global recession”. Had he substituted “Qatar” for “London”, the city’s mayor might have had a point. The 72-storey tower, which was inaugurated on 5 July, is 95 per cent owned by Qatar’s sovereign wealth fund and is the crowning asset in the Gulf state’s acquisition spree.

When the Shard’s public viewing gallery opens in February 2013, it will offer an apt vantage point from which to observe the emirate’s treasures. To the west lie Harrods, acquired by the Qatar Investment Authority (QIA) in 2010 for £1.5bn, and One Hyde Park, the world’s most expensive apartment block, which is owned by Project Grande (Guernsey), a joint venture between the Qatari prime minister, Sheikh Hamad bin Jassim bin Jaber al-Thani, and the property developers the Candy brothers. To the east lie the Olympic village, sold to the QIA subsidiary Qatari Diar for £557m last August, and Barclays Bank, 6.67 per cent-owned by the QIA, which is now its largest shareholder.

We are everywhere

In its long march through Britain’s institutions, Qatar has also acquired 26 per cent of Sainsbury’s, a 20 per cent stake in the London Stock Exchange, the Chelsea Barracks site and the US embassy building in Grosvenor Square. In the UK’s “Wimbledon” economy – we merely provide the venue and setting for the world’s financial players – Qatar is the Grand Slam champion. As the Sandhurst-educated sheikh boasted in a rare interview with the FT in 2010, “We are investing everywhere. Even your Harrods – we took it.” In the case of the care-home operator Southern Cross, the purchase of half of the firm’s 744 properties by the QIA led to it paying £100m in rent above the market rate, contributing to its collapse last year.

Where London is concerned, foreign ownership is increasingly the rule, rather than the exception. A study by Cambridge University last year, Who Owns the City?, found that 52 per cent of the Square Mile’s office stock is held by foreign investors, up from just 8 per cent in 1980. The former City minister Paul Myners has argued that “it is easier to take over a company here than anywhere else in the world”.

One need not be a “buy British” protectionist to be troubled by this trend. The unchecked rise in foreign ownership has left the UK’s economy more vulnerable to global shocks and its government less willing to dissent. Justin Bowden of the GMB union, which picketed al-Thani’s meeting with the Queen at Windsor Castle in 2010, notes that “Britain has to ensure that it never falls out with Qatar, or one day we might wake up and find this Gulf state has us at its mercy”.

When our politicians hail the Shard as a “new London icon” they are more right than they realise. There could be no better tribute to the city’s plutocratic economy than the Qataris’ gleaming petrotower.